IHS: Enphase muscles into inverter top 10 as sector breaks US$7 billion mark

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The global PV inverter market broke through the US$7 billion level for the first time in 2012, according to market research firm IHS.

Due to higher ASPs, microinverter leader Enphase muscled into the top 10 rankings based on revenue, the first microinverter firm to do so.

Sam Wilkinson, PV inverter research manager for IHS said: “Despite lower PV installation growth and rapid price declines, inverter sales have managed to generate growth, all be it at just low single-digit levels—a notable achievement amid such weak market conditions in the solar market.”

According to IHS, PV inverter growth was driven by increasing PV demand in Asia, notably in the fourth quarter of 2012. This helped to prop up sales overall as Europe/Middle East/Africa region (EMEA) experienced a 20% sequential decline.

“This helped to drive annual shipments to 31 gigawatts in 2012, up from 27 gigawatts in 2011,” added Wilkinson.

Pricing pressure continued to be a key feature of market dynamics in 2012. IHS noted that revenue growth was restrained slightly by intense price competition and a shift toward more sales in lower-price markets such as China, India and Eastern Europe.

IHS noted that the China, India and Eastern European markets lean towards larger inverters that have lower prices, driving a significant decline in average blended pricing, dampening actual revenue growth.

Quarterly shipments in Asia were said to have increased by almost 1GW, expanding annual shipments by 63% compared to the same time in 2011.

No surprises that China and Japan enjoyed record shipment levels in the fourth quarter, according to the market research firm.

“China and Japan are expected to account for a growing share of global demand, but these markets are notoriously difficult for non-domestic suppliers,” Wilkinson said. “Developing successful strategic partnerships and obtaining local certifications for products will be critical steps required for suppliers to succeed in penetrating these markets.”

Asia is also expected to be a key demand driver in 2013. IHS estimates that demand for PV inverters in Asia will increase by a further 60% in 2013, highlighting the regions dynamic growth rates.

In contrast, the position of European suppliers slipped in 2012. IHS said that Europe’s three largest PV suppliers experienced market share declines in 2012. Market share was said to have declined to less than 30% in the fourth quarter of the year, down from almost 50% in the first quarter of 2012.

Preliminary supplier rankings

According to preliminary findings from IHS, SMA, Power-One and Kaco topped the rankings in 2012. However, IHS noted that these suppliers’ had little if any meaningful penetration in the fastest-growing major markets of Japan and China continue to put their market share positions under pressure.

“SMA, which once was the undisputed market leader, saw its market share fall below 20 percent in the fourth quarter of 2012,” noted Wilkinson. “That’s the lowest level that we have on record in over six years of analysing the market. SMA has taken action by acquiring a stake in a Chinese supplier and aggressively targeting the Japanese market, and these are important steps in protecting its leading position in the PV inverter market. However, it remains to be seen if these actions will be aggressive enough as the PV market continues to fragment.”

Though regional market shifts have contributed to SMA’s share decline, technology innovations in the form of microinverters have also played a part.

Leading the microinverter pack was Enphase, which on a revenue basis entered the top 10 rankings for the first time in sixth position. However, IHS noted that based on megawatt shipments, Enphase would actually be outside the top 15. The inclusion in the revenue rankings was said to be primarily due to the higher ASPs associated with microinverters, compared to other traditional inverter companies.

IHS expects to release detailed PV inverter rankings for 2012 shortly.

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